[Study] 2016 Quebec municipalities ranking: municipalities can control their spending

Monday May 9, 2016

Whereas the previous editions of the Quebec Municipalities Rankings showed a disturbing upward trend in municipal spending, the trend seems to have slowed in 2014, when the mayors who were newly elected or re-elected in the most recent municipal elections, in 2013, began their terms of office. This is the main finding of the 2016 Quebec Municipalities Rankings compiled by the HEC Montréal Centre for Productivity and Prosperity (CPP). The study makes it possible to see how municipal spending evolved from 2009 to 2014 and to identify the main trends.

Control is possible

The study shows that while from 2010 to 2013 per capita municipal spending rose twice as quickly every year (6%) as did provincial government expenditures (3%), and three times faster than inflation (1.9%), the rate was only 0.9% in 2014. “This major reversal in the trend shows that Quebec municipalities, regardless of their size, can in fact control their spending,” observes CPP Director Robert Gagné.

Some municipalities even had negative growth in their spending in the last fiscal year. This was the case for the groups of municipalities with 10,000 to 24,999 residents (-1.6%), 50,000 to 99,000 residents (-0.5%) and 100,000 or more residents (-1.3%). “For all municipalities with populations of 100,000 or more, this decline translated into substantial overall savings of $98 million, or about $50 per capita, on average,” Gagné says. Remember that Quebec’s ten largest cities alone represent close to 50% of the province’s population.

“Our study also shows that there is no correlation between the arrival of a new administration and better control over costs,” indicates Gagné. “We found that spending grew more slowly whether the outgoing mayor was re-elected or not. That being said, it is quite likely that the elections themselves had some role to play in this regard. We did find that spending grew the most slowly during the first year – 2010 – of the last four-year term. This means that a careful watch should be kept on spending to ensure that this scenario isn’t repeated over the next few years.”

A powerful tool for democratization

The Quebec Municipalities Rankings are designed to allow Quebeckers to know the costs of the services provided by their municipalities. A total of 1,110 municipalities were examined, 30 indicators were studied and over a million pieces of data were compiled. The result is that with just a few clicks residents can find out how much their own municipalities spend on such items as management, compensation, snow removal, roads, police and fire departments, sewers, recreation, drinking water distribution, and garbage and recycling collection and, most importantly, whether these costs changed significantly between 2009 and 2014. An interactive map is also available to help explain these trends.

“Our goal with this exercise is to equip Quebeckers so that where appropriate they can question the decisions of their municipal councils, in order to obtain quality services at the lowest possible cost,” Gagné says. “In the end, we hope that by sharing municipal data and making it more widely understandable, we can help put the brakes on spending increases and improve practices. Although we can’t measure the real impact, we do hope that the publication of the rankings over the past four years has had some influence on the decline in spending growth that we observed for the very first time this year.”

The information presented in the rankings comes from the management indicators and financial reports that municipalities are required to submit to the Ministère des Affaires municipales et de l'Occupation du territoire (MAMOT) every year.

The HEC Montréal Centre for Productivity and Prosperity, created in 2009, has a twofold mission. First of all, it is devoted to research on productivity and prosperity, mainly in Quebec and in Canada as a whole. The Centre then shares its research findings, making them widely accessible and, in the end, educating people about productivity and prosperity. For more information on the Centre, visit www.hec.ca/cpp.